July 2014

07/31/2014

Taking the time to sit down with your spouse and update your estate plans will ensure that, should the worst happen, your new family is prepared to handle the unexpected.

A recent Motley Fool article, titled "Estate Planning for Newlyweds," says newly married couples should start their estate planning out small by changing their account beneficiaries. This should be automatic now that you have a spouse. Talk it through, weigh the options and your preferences, and then update all of your insurance policies, any existing will or trusts, bank and investment accounts, and your 401(k) and other retirement accounts.

The two of you should discuss how you want your assets to be divided in the event that one or both of you passes unexpectedly. When you are comfortable with your decisions, talk to your estate planning attorney and create a will that documents your intentions.

While you are in your estate planning attorney's office, ask him or her to set up a durable power of attorney, so that your spouse will have the ability to handle your individual financial affairs if you are incapacitated. The original article also suggest that you check with your banks and financial institutions to see if they require their own forms—some are hesitant or will not recognize your spouses' authority unless it is their “approved” paperwork.

You should also have an advance medical directive, so that your new wife or husband understands what you would want to occur in specific medical situations. Also, be sure you nominate each other as health care proxies. These two documents will set out your medical care preferences and allow each of you the authority of power of attorney to access medical records and make health care decisions.

The Motley Fool article discusses several other estate planning matters newlyweds should discuss. Once the two of you are one—as far as your estate planning ideas—sit down with an experienced estate planning attorney and draft all of the necessary documents. Planning for the worst, the article cautions, will give your family security, solidity, and protection.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.FV3vAVIO.dpuf

07/30/2014

Many older people moving into a nursing home or retirement community are experiencing cognitive decline. In legal terms, they no longer have the capacity to make financial or medical decisions for themselves. So a trusted person—usually an adult child—will sign the entrance contract on their behalf as power of attorney.

There tends to be a lot of confusion over entering into an agreement for long-term care for a loved one who is cognitively impaired. If you are signing your name under "Responsible Party," do you know what you are signing up for?

A recent MarketWatch article, titled "How a parent’s health-care bills could hurt you," says you should be aware of the issues when signing your name in lieu of your parent’s on a contract without adding any clarifying language. In most cases, you are acting as a guarantor who is personally responsible for the payments.

This can come up when dealing with a family member's hospital and doctor bills which are not covered by insurance. Typically, the patient or patient’s representative signs a form stating that they will be responsible for such expenses before the treatment begins.

Without noting your signature, you could be responsible for some hefty bills—monthly fees at a retirement facility or nursing home can be $10,000 or more.

That might not be what you signed up for!

Estate planning and elder law attorneys will counsel you to set up a “durable” power of attorney. A durable power of attorney lets a trusted individual (in legal terms "the agent") retain power of attorney even when the family member who signed the document (the “principal”) is now incapacitated.

For example, as the named agent for your family member on a financial power of attorney document, you have access to his or her banking to pay the retirement or nursing home on their behalf. Again, you need to remember one thing when signing a contract and agreement; otherwise, you will be personally guaranteeing the payments.

The MarketWatch article recommends you separate your responsibility as power of attorney from the financial responsibility of your family member by signing their name as the responsible party on the contract, and after that write, “by [your name] as power of attorney,” followed by the date.

So it would look something like this:

by Alvin Hancock as power of attorney, July 22, 2014

Do not get into trouble and put the care of your family member in jeopardy. Talk to an estate planning attorney to set up a durable power of attorney to help you take care of your family member and protect your money.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.FV3vAVIO.dpuf

07/29/2014

Identifying a successor is the first step in the planning process. Many owners of family businesses turn to an adult child, a grandchild or other relative to take over the reins.

Have you thought about what will happen to your business in the future? Although it's not an easy decision, the initial step in the planning process for small business owners should be choosing a successor. In many instances, this will be an adult child or grandchild assuming control of the business. A recent Kiplinger's Personal Finance article, titled "Retirement: plan to pass on a family business," encourages business owners looking at family members as successors to look at their qualities as managers and entrepreneurs. Someone may be a good manager, Kiplinger says, but may not have the ability to focus on the big picture or think strategically.

As soon as you have made your selection, start training that person to run the company. Ideally, this process should take three to five years, giving your successor time to earn the employees' respect and to be comfortable with all of the various parts of the business.

The next step should be to figure out how you will be compensated to start a stream of income for your retirement. The original article advises business owners to review all of their assets and income sources during succession planning to determine how much money they will need from the business to live comfortably in retirement.

Another critical part of the business succession process is estate planning. Giving shares of stock in the enterprise is a common way to accomplish this, and it is a tax-efficient way to transfer the value of a company.

Did you know that you can transfer shares worth up to $14,000 ($28,000 for a couple) to an individual annually without federal gift-tax liability? Any amount above this counts against the estate tax limits when you pass away. If you have a little time on your side—such as a number of years to plan—you can may these gifts, trusts, or partnerships. These strategies allow you to move a large portion of the business to your successors without giving up control until you are ready. Read about this and more in the original article.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.FV3vAVIO.dpuf

07/28/2014

"Just because you have an extremely restrictive prenup doesn't mean you can't leave money to your wife," Mr. Bishop says. "The prenup protected the client's assets from being taken against his will, but he was still free to give them at his discretion."

How do prenuptial agreements and estate plans mix? Will your spouse be provided for in the event of your death, or will the prenup halt financial circumstances?

Take a lesson from a recent Wall Street Journal article, titled "Creating an Estate Plan Around a Prenup." The article chronicles how an estate planning attorney worked with a client to ensure the needs of the client were addressed. After thoroughly understanding the estate planning goals of the client, the attorney created a plan that provided for the client’s family after he passed away. This plan preserved the terms of the prenuptial agreement that kept his wife from taking his assets and business in a divorce. The adviser suggested using family limited partnerships. This type of entity gave the client a way to provide for his wife with income from the business—without giving her control of the enterprise.

Under the family limited partnership structure, the client had 99% limited partner ownership in the two companies. When he died, his will would set out some of the limited partner interest to his wife. These shares would be given to a testamentary trust with the wife as trustee and beneficiary. As a result, the wife would receive income from the business through the trust; however, she would not get a controlling stake in the company.

The estate planning attorney created the partnerships and transferred ownership of the business assets into them. The WSJ reported that the client and his wife have been very happy with the results for more than 15 years now, with both a strong business and marriage.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.FV3vAVIO.dpuf

07/25/2014

A power of attorney is a legal document that allows you to appoint someone you know and trust to make decisions on your behalf when you cannot make them yourself. A recent article in The Star-Ledger, titled "Your Money: The truth about 'power of attorney' documents," provides helpful information about the essential subject of powers of attorney and their uses.

A "Special Power of Attorney" grants an individual the authority to perform a specific act or acts. Just like the name implies, this authority is limited to the special powers listed.

A "Durable Power of Attorney" expressly provides that it is not terminated by the grantor's incapacity. In contrast, a "Non-Durable Powers of Attorney" is terminated if the principal becomes incapacitated. The document can be as broad or as specific as the grantor wants, but generally it gives a person expansive powers and is used when the grantor becomes incapable of managing his or her affairs.

Similarly, a "Springing Power of Attorney" can also be very particular or expansive, but it only "springs" into effect if the principal becomes incapacitated. Caution: this type of document can create issues, as financial institutions will not recognize this POA until they receive official notification of the incapacity of the grantor.

Last, some states have a "Statutory Power of Attorney" in which case the POA need only be presented to the financial institution. The institution must honor a validly executed POA unless it believes in good faith that it does not look genuine, that the principal is deceased, that the document has been revoked, or that the principal was under a disability when he or she signed it.

Some financial institutions may not be helpful. In fact, some will insist that their particular form needs to be completed. Also, if incapacity has already occurred and an institution is unwilling to honor the POA, The Star-Ledger suggests that you bring in your estate planning attorney to help resolve the issue. Finally, the article reminds us that a POA commonly only covers financial matters, and that a separate health care POA is needed for health issues.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf

07/24/2014

Your will is an essential tool in making sure that your property goes to the people you want to receive it after your death. By keeping these simple facts in mind, you can use this tool more effectively and avoid the mistakes that can cause huge problems down the road.

Think you know everything about wills? Whether you've been schooled on wills or not, there are some facts about wills everyone should know.

Even in the Electronic Age, You Must Still Follow the Formalities. The laws covering wills are some of the oldest we have in this country. The ownership and postmortem transfer of property has been going on long before the United States was around. One frequent complaint is that the laws and the courts are not keeping up with technology. Even with our Smartphone and eSignatures, creating a will that is going to be found valid still requires that you follow the often-antiquated laws precisely. In most states, it is critical that you sign the will in the presence of witnesses, who will have the duty of testifying in probate court after your death to say that the will was validly signed (e.g., some states require the witnesses' signatures to be notarized in order to have a “self-proving will,” thereby eliminating the need for the witnesses to later testify as to the will’s validity).

A Will is a Good Idea Even if You're Poor. Many young people, and those who believe they are of modest means, do not think they need to create a will. They think that with little or no assets, they do not have anything to leave. However, if you are a parent of any minor children, many states provide that your will is the place where you appoint the person you would like to take care of your children in the event you pass away. If you do not choose a guardian, then a judge will decide.

If You Don't Update Your Will, the Law Might Do It for You. When major life events occur, like marriage, divorce, the birth of a child, or the death of a close family member, people many times fail to update their wills and other estate planning documents. This can result in undesirable results in some circumstances. In light of this, the laws in some states may “rewrite” your will for you … even if you deliberately choose to do nothing.

Your will is an essential and vital legal device to ensure that your property passes to the individuals you intend to inherit it after your death. By heeding these simple reminders and others from an experienced estate planning attorney, you can use your will to more effectively avoid mistakes that can cause huge problems down the road.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf

07/23/2014

Financial planners are not just for rich people. Everyone, no matter where you stand financially, can benefit from the advice and guidance of a qualified financial planner.

You have probably received a lot of free financial advice over the years from friends, family and coworkers. But how do you know which advice to follow? It can get complicated quickly, and some people do not know what to do. As a result, many do nothing. They put off planning until later in life and then start to panic. That being said, a good financial planner can help clarify and prioritize your goals helping you make the most of your money.

A recent USA TODAY article, titled “How to find the right financial adviser,” states that no matter where you stand financially, you can benefit from the advice and guidance of a qualified financial planner. The article advises that even for those with modest savings can see a significant change in their lives with a one- or two-hour session with a planner.

Many financial planners are members of professional organizations that certify them, such as the Certified Financial Planner Board, which is an independent professional regulatory organization. To earn this certification, a financial planner must meet all the requirements, including extensive study and a comprehensive test on the financial planning process, investment planning, income tax planning, retirement planning and employee benefits and estate planning. There are several other prominent financial planning designations, and you should work with your estate planning attorney, who either will have this type of certification or know of a qualified financial planner to help you design a plan to meet your objectives.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf

07/22/2014

In some cases, outdated or inadequate estate plans have led to highly-publicized disputes between heirs that have squandered fortunes and diminished legacies. These situations are more tragic because they are usually entirely avoidable, especially when advisors are willing to facilitate difficult conversations.

An estate plan is no "one and done" project. In fact, it's very much like a snapshot of your life and your wishes at the time it was created. As your life changes, your priorities will shift. Consequently, it is very important to update your estate plan regularly.

“An estate plan is not a time capsule to be opened and dissected at some distant point in the future," according recent Forbes article. The article, titled "Why You Should Update Your Estate Plan," explains that many ultra-wealthy individuals have a valid estate plan in place, but have not reviewed and updated their plans after they first signed them. In some instances, an outdated or insufficient estate plan have caused disputes between heirs. Unfortunately, many of these situations are even more tragic because they are usually avoidable, especially when professionals can facilitate difficult conversations.

The original article notes that family members will often shy away from the estate planning process because it typically means some tough discussions. However, the article reminds us that this can be a wonderful opportunity for your estate planning attorney to educate family members on the benefits and risks of planning while helping to bridge family divides. In fact, the "key is to evaluate the impact on the estate or wealth transfer plan of all major decisions and life events as elements of a broader generational family wealth strategy." As a result, this can simplify an ongoing process and reduce the possibility of damaging legal disputes on the disposition of family assets in the future.

The easiest way to decide when to review your estate plan is: (i) when there is a meaningful change in your life; or (ii) every few years just to make sure you are up-to-date with the changing tax laws. Contact your estate planning attorney to make sure your estate plan is current and your wishes will be carried out when the time comes.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf

07/21/2014

[Glen Campbell's wife] Kim Campbell told The Associated Press in an email Thursday that the 78-year-old's Alzheimer's disease has progressed to the point that he needs access to medical care 24 hours a day.

When Alzheimer's strikes, the decision of how to care for a loved one can be increasingly challenging as the disease progresses.

Kim Woolen Campbell, Glenn Campbell's wife, recently told The Associated Press via email that the country and pop music legend was suffering from his Alzheimer's disease to such an extent that he needed access to medical care 24 hours a day. The 78-year-old singer's doctors encouraged her earlier this year to discontinue care at the family's home and move him to a care facility. He has been suffering from the degenerative neurological condition for about three years.

His daughter Debby Campbell told Country Weekly in June that she was opposed to the decision, and that she did not feel Campbell's family was spending enough time with him in Nashville.

No doubt with a star of this magnitude, the details will come out about how he planned for his long-term care. You should take some time to talk to your own estate planning and elder law attorney to cover just such circumstances.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.xLtmpIio.dpuf

07/18/2014

Ordinarily, the deadline for taking this so-called required minimum distribution is Dec. 31. But for your first such distribution you get until April 1 of the year following the year you turn 70½ to make the withdrawal.

Do you know when you can withdraw from your IRA? According to the tax law, from age 59½ to 70½ you are generally allowed to withdraw any amount you want from your traditional IRA without incurring a penalty or paying taxes on previously untaxed amounts. After you reach age 70½ you are required to withdraw a minimum amount every year or be subject to a hefty tax penalty. The deadline for taking this required minimum distribution is Dec. 31st, but for your first distribution you are given until April 1st of the year following the year you turn 70½ to make the withdrawal.

Many investors make use of this three-month grace period. As of Dec. 31, 2013, some 40% of those required to take their first distribution had not yet taken the minimum amount, according to The Wall Street Journal in an article titled "Understanding Required IRA Distributions." That number of investors includes 14% who had not taken any distributions at all. If that is you, then the WSJ says you better get moving! If you miss the April 1st deadline, the IRS can penalize you up to 50% of the amount you were supposed to withdraw.

When do you take that initial required minimum distribution, and does that take care of all of that calendar year? It depends, the article says. If you turned 70½ last year and waited until this year to take all or part of your first required minimum distribution, you would still need to take your 2014 required minimum distribution by Dec. 31st of 2014. Likewise, withdrawals above and beyond the minimum in one year do not count toward required distributions in future years—you cannot apply it forward.

In which year is that first distribution taxable? The Wall Street Journal article says the basic answer is that the initial distribution is taxable in the year it is taken. So if you delayed taking it until 2014, the taxable portion of both your initial distribution and your 2014 distribution must be reported as income on your 2014 tax return. If those withdrawals are large enough, it could put you in a higher tax bracket this tax year. The financial institution that administers your IRA should be able to calculate your required minimum distribution and your IRA balance as of the previous year's end. Some IRA administrators will automatically calculate your required minimum distribution and then transfer it to an account of your choice, the WSJ says.

Can one have the financial institution that handles his IRA withhold the tax on his distribution, and, if so, whether the tax itself would still count toward his required minimum distribution amount? Yes to both parts of this question. In fact, unless you request otherwise, your IRA administrator must withhold federal (and, if applicable, state tax on your distribution), along with reporting withdrawals and any taxes withheld to you and the IRS on Form 1099-R.

Questions about IRA distributions, tax ramifications, and planning for retirement should be directed to an experienced estate planning attorney. He or she will be able to help you put together the best strategy based on your needs and objectives.

Please take the time to visit our Montgomery County Maryland Estate Planning website for more information and to schedule your initial consultation. Follow the link below to learn more about our Estate Planning, Probate and Estate Administration, Elder Law, Asset Protection, Business Succession, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Non-Traditional Couples services provided at Meyers, Rodbell & Rosenbaum P.A. http://www.mrrlawestateplanning.net/Practice-Areas.php - See more at: http://blog.mrrlawestateplanning.net/#sthash.eEfwO3kC.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.YVPcOnfQ.dpuf - See more at: http://blog.mrrlawestateplanning.net/page/3/#sthash.g5Vlttl0.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.0xJxTDEY.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vCcKLrDf.dpuf - See more at: http://blog.mrrlawestateplanning.net/#sthash.vEndyaTK.dpuf